Local Currencies Really Can Buy Happiness

Interest-free money, much like that propounded in the anti-usury classic Social Credit, has the potential to end exploitation and de-fund illegitimate Jewish power.

by M.C. Cardinale
International Federation of Environmental Journalists

IN THE FACE of an economic system which seems to be premised on environmental harm and profit-driven growth, a handful of communities across the U.S. and the globe have begun experimenting with alternative forms of local currency as a pathway to sustainability.

Local currencies existing today in the U.S. include the Humboldt Community Currency in Eureka, California; Berkshares in the Massachusetts Berkshire region; Bay Bucks in Traverse City, Michigan; Ithaca Hours in Ithaca, New York; Cascadia Hours, Corvalis Hours, and RiverHours in Oregon; Equal Dollars in Philadelphia, Pennsylvania; and Madison Hours in Madison, Wisconsin, according to the E. F. Schumacher Society, which runs Berkshares.

Canadian community currencies are located in Calgary, Alberta; Salt Spring Island, British Columbia; Tamworth, Toronto and the Madawaska Valley, both in Ontario, which is promoting a “usury-free dollar”.

There are also community currencies in Tlaxpana, Mexico; and East Sussex and Devon, England; as well as a regional currency based in Basel, Switzerland, which can also be exchanged in parts of Germany and France.

What these currencies have in common is that they represent an effort to respond to the pressures of globalisation, like the advent of massive chain stores competing with local merchants.

People in Berkshire can go to one of five participating local banks to trade 95 cents for one Berkshare, at a five percent discount to the dollar. Then, they can spend Berkshares at over 400 participating local stores as a direct replacement for dollars, and thus save 5 cents with every Berkshare they spend.

Even though store owners lose the 5 cents whenever they trade Berkshares back for dollars at a bank — which they have to do to buy something that can’t be produced locally — they are still typically happy with the loyal, local customers they keep instead of losing them to chains like Wal-Mart, Starbucks, and Barnes & Noble.

“Local currencies are part of what educate people about the importance of their small, independent businesses. It’s bringing people off the Internet, back to Main Street, for the face-to-face exchanges. Once they’re there, they like it,” Susan Witt, founder of Berkshares, told IPS.

There are many ways having a local currency can help create a more sustainable economy, say leaders in the local currency movement.

First, because using a community currency forces people to buy locally, fewer goods have to be imported.

“By having economic transactions be so focused locally, that’s definitely, for one thing, reducing use of fossil fuel. If it’s a local farmer’s market… food [is] produced 30 miles away instead of 3,000 miles away,” said Steve Burke, executive director of Ithaca Hours, said.

Trade theorists might object that it is less efficient, or less productive, for diverse goods to be produced in many communities than it is for each community to specialise in producing one product for export, even factoring in transportation costs.

“Is it the real cost of transportation?” asked Susan Witt, founder of Berkshares. “Is the real cost and consequences of our dependence on fossil fuels to transport goods really factored into the cost? Is climate deterioration factored in? Is engaging in conflicts for limited supplies of fossil fuels?”

“Nor all the costs of unemployment in our local communities? Nor the hollowness of our life experiences? Nor the human costs in [other countries]… for maybe manufacturing practices that we would not ourselves allow in this country?” she wondered.

A second way in which community currencies support environmental sustainability is that they can lead to reduced consumption, Witt argues. Witt believes that people purchase more and more “stuff”, not because they need it, but to fill a void that community currency can satisfy.

“You know the full story about the goods you purchase. You know how they were produced. You know the carpenter who made the table. You know who her children are. You realise buying the table is supporting that family,” Witt said.

The products bought with local currency “link you to your neighbourhood, your place, the people of your place. They’re not just stuff… they enrich your life the way that stuff would not. So you need less.”

“One hand-knit wool sweater, coming from wool from sheep that graze on the hillside on the way to work, that satisfies you in a way four sweaters from unknown sources fails to do. You care for it in a different way,” Witt said.

A third way in which community currency can lead to sustainable economy is communities can print the currency they need to issue interest-free, or non-profit loans. Allowing credit to be issued interest-free eliminates the need to service growing debts. High-interest debt owed by individuals, businesses, and governments to private banks is one of the main factors pushing economies to constantly grow at an exponential rate. As these entities struggle to service the interest on their debts with a total money supply that was mostly created through issuance of credit, more and more new debt must be created in order for the system to be stable.

Thus, because high-interest debt pushes the economy to constantly grow, it also pushes industrialisation into new markets, new products, and new technologies, which often lead to deforestation, air pollution, and the like.

By communities printing and issuing their own currency, in part through productive non-profit loans, the economy can function without the constant growth that is imperiling the environment.

There are at least two different models for how to organise and operate a local currency that local communities are using. One is used by Berkshares; the other was pioneered by the Ithaca Hour.

Founded in 1991, the Ithaca Hour is the oldest local currency to exist in the U.S. since local currencies disappeared in the 1900s. Numerous local currencies have since based their model on the Ithaca Hour.

Businesses become members in Ithaca Hours by purchasing a listing in the Ithaca Hours directory, and they receive two “hours” every year as part of their membership fee. Employees at these businesses then can accept hours instead of dollars for some of their wages. People can accept hours instead of dollars for services, like mowing a lawn, that they provide.

This, in addition to low-cost loans, is the primary way Ithaca Hours enter Ithaca’s economy.

“There’s a pretty fundamental difference between our model and the Berkshares model,” Burke said. “They sell them. With ours, you can’t buy them; you can only earn them.”

They are called hours “to make a statement”, Burke said. The founders “wanted to emphasise the relationship between time and money.”

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